Rational utility maximizing consumers tend to:
A) buy the same bundle of goods regardless of the prices charged.
B) choose the same bundle of goods regardless of their income.
C) change their consumption choices when either prices or income changes.
D) change their consumption choices only when both prices and income changes simultaneously.

Question

Quizplus · Accepted Answer

Rational utility maximizing consumers will adjust their consumption choices based on changes in either the prices of goods or their income. This is because they will try to maximize their utility (satisfaction) within their budget constraint, which changes when there are changes in prices or income. Therefore, option C is the best choice. Option A and B are incorrect because rational consumers will adjust their consumption choices based on changes in prices or income, therefore, they will not always buy the same bundle of goods and their choice of consumption bundle will also vary based on their income. Option D is incorrect as well because rational consumers will adjust their consumption choices based on changes in either prices or income and not necessarily both at the same time.

Rational Utility Maximizing Consumers Tend To